Understanding the impact of a particular activity on the financial profile of a client or company is often an arduous task. It will be understood that a financial profile of a client is often created by a financial advisor from a multi-faceted analysis of the financial information of the client. Exemplary financial information that may be incorporated into the creation of a financial profile may include net worth, assets, liabilities, investments, retirement needs, and so forth. Financial information must be balanced against the financial goals of the client as well as other ancillary factors. Ancillary factors may include, but are not limited to, age, potential earning capacity, and lifestyle habits—just to name a few.
While creating a financial profile for a client is difficult, balancing the possible changes to such a multi-faceted financial profile by even a single financial activity may be an even greater task. Therefore, financial advisors may spend countless hours evaluating the financial impact of even the smallest proposed financial activity. Failure to either adequately generate an accurate financial profile of the client or properly gauge the financial impact of a proposed financial activity on the financial profile of the client may lead to undesirable financial consequences. Oftentimes, the negligence or subjective biases of the financial advisor may lead to the provision of erroneous financial advice to clients.